Romneycare Compliance

This informative story by Sarah Kliff explains how the Massachusetts health reform law has been working. What's most interesting is how the Romney-supported insurance mandate has operated. Even though the cost of the penalty for not buying insurance has been far lower than the cost of buying "mandated" insurance, people have overwhelmingly opted for insurance. In other words, compliance with the mandate has been very high, and the number of uninsured people in Massachusetts has fallen fairly dramatically. Two thirds of the population support the law, though health care cost control remains a problem. Worth reading.

CFPB Credit Card Complaint Database Goes Public Today

Reporter Ylan Mui explains here that

The Consumer Financial Protection Bureau [today] will begin releasing detailed information on Americans’ complaints about their credit cards, part of a public database that the agency hopes will be both comprehensive and granular. Complaints are the primary way that most consumers interact with the new agency. The CFPB said it has received more than 45,000 in the year since the bureau was launched. How it handles those complaints — and how much it makes public — has been a source of tension between the agency and financial industry groups. ... The CFPB said it will only publish complaints after it has verified the consumer’s relationship with the company. The new database will include not only the name of the company involved, but also the nature of the complaint and the consumer’s Zip code. It will also report whether the firm responded in a timely manner, how the matter was resolved and any disputes. CFPB Director Richard Cordray said that the information represents the first time such detailed data would be available publicly.

Read another article on the new CFPB database. (The article also notes CFPB's claim that the agency has resolved to the consumer's satisfaction around 80% of the 45,000 complaints it has received to date).

According to the AMA, 10% of Major Health Insurance Claims Are Processed Inaccurately

That sounds pretty bad, but it's a big improvement. According to this article in the Chicago Tribune, "[i]nsurance companies incorrectly processed about one in 10 claims in the early part of 2012, a vast improvement over the same period last year," according to the American Medical Association. "In its fifth annual National Health Insurer Report Card, the AMA said the nation's seven largest health insurers paid doctors and other providers the wrong amount 9.5 percent of the time this year, compared with 19.3 percent in 2011." Go here to read all the AMA data.

Who is Responsible for the Length of Checking Account Disclosures?

by Jeff Sovern

A recent report by the Pew Charitable Trust, Still Risky: An Update on the Safety and Transparency of Checking Accounts, found that the median length of bank checking account disclosures among the banks included within the study ran 69 pages.  The response by Consumer Bankers Association president Richard Hunt in this MSNBC report: "We don't like it."  In answer to the question of why bank disclosures are so long, he said "We have to.  All the regulations passed by Congress and regulators force us to do so." But according to the report, credit union checking account disclosures are less than half the length of bank checking account disclosures (though they are still longer than desirable at a median of 31 pages), and one bank's disclosures spanned 21 pages. 

The median number of bank fees was 26; some banks had 48 fees.  By contrast, no credit union examined charged more than 29 fees.  Can federal regulators be blamed for the number of fees banks choose to charge?  And just what are these fees, anyway?  According to page 45 of the report, among the fees disclosed were fees for

“empty envelope,“ “bad address,” “online images and photocopy requests: self-service through online banking,” “domestic wire transfer email notification,” “coins deposited (large amount),” “rejected offline ATM transactions,” and “customer service representative assisted transfer.”

 Is it Congress's fault when a bank chooses to charge a  fee for sending an empty emvelope or coins?  Could it be that banks are inflating the number of fees they charge in an effort to trigger information overload so that consumers don't read the disclosures? 

Obesity and Behavior Modification

At this blog, we have covered extensively the health and economic costs of the obestiy epidemic and policy efforts at fighting it. Read this article by David H. Freedman about how the behavior modification techniques of B.F. Skinner are being used (with some success) in combatting obesity.

The Federal Communications Commission to Look Again at Cell Phone Radiation Risks

The Federal Communications Commission looked at the safety risks of mobile phone radiation and set regulatory standards about 15 years ago. Since then, concerns have been raised about whether cell phone use causes brain cancer. Studies have not found a definitive link, but those studies were done when people used phones and other radiation-emitting devices less frequently than they do today. With longer and more frequent calls, the FCC wants to take another look. Read about the FCC's plans here.

Preparing for Supreme Court's Affordable Care Act Ruling

How are Congress and the President preparing for a ruling that would nix all or part of the Affordable Care Act? Read about it here.

FTC Acts Against Forensic Mortgage Loan Audit Scam

The Federal Trade Commission on Wednesday got a temporary restraining order against a group of companies that the agency alleges preyed on financially vulnerable homeowners, convincing them to pay $1,995 or more by holding out bogus promises that they could help them avoid foreclosure and renegotiate their mortgage. The TRO stops the allegedly illegal conduct, freezes the companies' assets, and appoints a receiver to run the business while the FTC moves forward with the case. According to the FTC's press release, The complaint charges the defendants with violating the FTC Act and the Mortgage Assistance Relief Services Rule, known as the MARS Rule, by, among other things, deceptively telling consumers that they could renegotiate mortgages, making payments substantially more affordable; that they could use the “forensic audits” to negotiate with lenders; and that if they failed to do these things, they would provide a refund.

Law Schools Shrinking?

A Wall Street Journal article reports that at least ten law schools are reducing the size of this year’s incoming class. My guess is that the number is actually higher. The reasons given for the reductions are generally described as the quality and size of the applicant pool and the employment situation. As the article notes, however, there is an elephant in the room—the U.S. News rankings:

Shrinking class size could help schools maintain their all-important U.S. News rankings even as the pool of applicants declines. By cutting the number of places available, a law school can be just as selective, or even more so, about prospective students' LSAT scores and undergrad grade-point averages.

         "They are trying to get a class that mirrors prior classes, but with fewer applicants and enrollees," says Indiana University's Mr. Henderson.

         The number of law graduates per year spiked to 44,495 this year from 42,673 in 2006, and the American Bar Association accredited 10 new law schools over the same period.

         But the high-paying law-firm jobs many of those students had hoped to land are in short supply, and some top firms have scaled back their hiring of entry-level lawyers by as much as half since the financial crisis started in 2008. "This is long overdue," Mr. Wu says of the class reductions. "The expectations about law school have been out of whack since I was in law school," he says, adding that he earned his law degree in 1991 and practiced at Morrison & Foerster LLP in San Francisco before entering academia.

         For the law-school class of 2011, employment rates are at an 18-year low, according to a survey by the NALP, a nonprofit educational association for the legal profession.

Look for many more schools to consider reduced class size in the future.

 

Regulatory Malfunctions Exposed

Lisa Heinzerling has written two pieces at the Georgetown Law Faculty Blog concerning regulatory failures at the Department of Justice and the Food & Drug Administration.

This essay discusses a DOJ cost-benefit analysis performed in conjunction with the issuance of a rule implementing The Prison Rape Elimination Act. Here's an excerpt:

DOJ found itself in the remarkable position of asking how much money the victims of rape would be willing to pay to avoid rape and also asking how much money these victims would be willing to accept in exchange for being raped.  In the strange logic and twisted morality of cost-benefit analysis, the victim – not the perpetrator – must be willing to pay up to avoid the crime.  If not, well, too bad for the victim. Never mind that rape is a serious crime, not a market transaction.  Never mind that framing rape as a market transaction strips it of the coercion that defines it. ***  Applying cost-benefit analysis to rape takes this already-troubled methodology to a new, and bad, frontier. The Obama Administration should ask itself whether this is the kind of legacy it hopes to deepen in a second term: a legacy that holds that any human encounter, no matter how violent and coerced, can be treated as just another day at the market.

Read the entire piece for more on this outrage.

Heinzerling's other piece tells the story of inexcusable delay in the FDA's consideration of a rule to limit the use of antibiotics in animal feed. (The failure to impose reasonable limits can lead to antibiotic resistance in humans.)